In its first update two months after markedly reducing projected hotel performance its 2024 U.S hotel forecast, STR and Tourism Economics on Thursday basically held steady to those numbers, slightly increasing its occupancy projection while lowering its forecast rate, the companies announced.
The companies now project 2024 U.S occupancy of 63 percent, matching the 2023 level, a figure 0.2 percentage points higher than its June forecast. They also project 2024 average daily rate to increase 2 percent year over year, down from the 2.1 percent previously forecast.
STR continues to forecast 2024 revenue per available room to increase 2 percent, the same forecast as in June. That projection varies notably by service tier, with 2024 RevPAR at U.S. upper upscale and upscale hotels forecast to increase 3 percent and 2.7 percent respectively but decline 2.7 percent at economy hotels.
“Midscale and economy hotels are continuing to feel the effect of fewer lower-income travelers,” STR president Amanda Hite said in a statement. “On the other hand, high-income households continue to travel, but domestic levels are constrained due to an increase in outbound travel. The stronger dollar continues to pressure international inbound demand, especially as the cost-of-living crisis continues in Europe and airlift rebuilds across Asia Pacific.”
STR and Tourism Economics for full-year 2025 projected U.S. hotel occupancy of 63.4 percent—up from the 63.2 percent projected in June—with ADR increasing 2 percent year over year and RevPAR increasing 2.6 percent, matching the June projection.
“Economic growth is expected to be slower next year, but with strong household balance sheets, a gradual upswing expected in business investment, and moderating inflation, we anticipate a favorable context for moderate travel growth, Tourism Economics director of industry studies Aran Ryan said in a statement. “Further gains in international inbound travel, as well as in business and group travel, are also expected to help support lodging demand growth next year.”
